The Book on Amazon.com

'Earth's Biggest Bookstore' Helped to Pioneer Shopping on the Web. But Can It Survive With Barnes & Noble Now in the Fray?

July 20, 1997|JONATHAN LITTMAN | Jonathan Littman, author of "The Watchman' (Little, Brown), lives in Mill Valley and writes about technology. He can be reached at jlittman@well.com

From Jeffrey Bezos' office window, one sees evidence of the legendary frugality of the founder and chief executive of Amazon.com. This may be downtown Seattle, but it isn't exactly a high-rent district. Across the street stand a pawnshop, a wig store and the Green Tortoise Hostel. Homeless men mill about, drinking out of paper bags. Bezos understands the power of example, of managing and marketing by metaphor. He says he buys the best computers and hires the best people and scrimps nearly everywhere else. The only sign announcing Amazon.com's headquarters is a sheet of paper stuck in a plant in the lobby.

Bezos' cramped office is no bigger than his assistant's, and his desk, like those of many of his employees, is an unfinished door with 4-by-4s for legs. But there's a mood of fun and curiosity. Amazon.com has the buzz of an Internet start-up, though the geek talk has a literary ring. Degrees in English literature are more common than those in computer science, and the ranks of customer-service representatives have included a Rhodes scholar.

Bezos' office emphasizes function--a sleeping bag in the corner for late nights and three white shirts on hangers--but I'm struck by what's on the white board up on the wall. By chance, on the flight up from San Francisco the night before, I sat next to a marketing guru who recently had been interviewed by Bezos for a job. Bezos, he said, had talked excitedly for an hour about something called "affinity marketing.' My seatmate breathlessly described the possibilities: all kinds of products and services that might one day be marketed to Amazon.com's high-income "virtual community.' When I asked for examples, his answer was all encompassing: "Anything you do in your leisure time.'

Waiting for Bezos to arrive for our interview, I scrawl down a few of the couple dozen words on his white board: music, cars, computers, real estate. Could these be the affinity markets, the new opportunities Bezos is considering? Before I can scribble down any more, Bezos bounces in, wearing his trademark white shirt and khakis, chuckling when I kid him about the lunch he's brought--a lumpy scrap of pizza with teeth marks. Bezos loves to laugh, and when he does he often doubles over his diminutive frame. He's one of those rare people whose imperfections--a receding hairline, crooked nose and floppy ears--just make him appear friendly. He looks like an eager puppy.

As told by Bezos, the mercurial rise of Amazon.com already has a Horatio Alger ring. He spent his summers at his grandfather's cattle ranch in Cotulla, Tex., from the age of 4 to 16, laying water lines, building fences, fixing windmills and even, he laughs, "castrating cattle.' He wanted to be a physicist and began studying the lofty discipline at Princeton. By his sophomore year, he realized that his talent was in computers.

"Have you ever driven a bulldozer?' Bezos asks, bouncing forward in his chair, flashing the whites of his eyes. "I've driven a DC Caterpillar. I even helped repair it. At core we're tool-loving people. Computers give you so much leverage.' Bezos pauses, setting up his favorite word. "It can be huge.'

Bezos leveraged his computer skills on Wall Street, where he became a quantitative hedge-fund manager for D. E. Shaw & Co, the investment firm, and its youngest senior vice president. The kid fond of big tools became an integral part of a company that he says changed the way things were done in statistical arbitrage. "We turned the business upside down,' he says. "Normally there's a human trader running the show with a sophisticated [computer] support group. We reversed that model. It becomes man helping machine. As soon as you make that shift, it's deep.'

In the spring of 1994, Bezos surfed the World Wide Web for the first time and happened upon a site projecting annual Web growth at an astounding 2,300%. "This is going to be huge,' he remembers thinking. Next, he was thinking what he could sell. After scratching out a list of 20 ventures that included music and clothing, he settled on books. Why? To Bezos, the billions spent annually on books represented a "huge' market. And he felt people would be comfortable buying books their first time online.